In this project, we have focused our research efforts on the studies of bone morphogenetic proteins (BMP's), GATA-binding proteins and homeobox-containing proteins. These proteins play important roles in embryonic development. Their physiological roles are summarized. 1) BMP-1 (XBMP-1 or Xtld, a Xenopus homolog of dorso-ventral polarity gene in Drosophila) modifies tissue phenotypes of the ventral explants. It causes the elongation of ventral marginal zone (VMZ) explants and converts the blood cells to mesenchymal cells at later developmental stages. 2) BMP-4 (XBMP-4, a Xenopus homolog of Drosophila dpp gene) affects dorsal-ventral patterning, stimulates primary erythropoiesis in ventral mesoderm and inhibits neurogenesis in ectoderm. 3) The three transcription factors GATA-1a, GATA-1b and GATA-2 are each able to stimulate erythropoiesis but only GATA-1b exhibits neural-suppressing activity. GATA-1b can function in ectoderm to specifically inhibit the expression of chordin, a neuralizing gene. 4) Xmsx-1 or Xhox7.1, the Xenopus homologue of a homeobox gene (msx-1 or hox7.1) modifies mesodermal tissue pattern along dorso-ventral axis in Xenopus laevis embryo. In studies of signal transduction, we demonstrated that GATA-2 and Xmsx-1 function downstream of BMP-4 signaling. The immediate target gene of BMP-4 signal, MAD (mothers against decapentaplegic), is currently under investigation.